'Indignant' Villarreal slam penalty re-take due to VAR review    North Korea launches more short-range missiles, clouding prospects for talks    Syrian offensive is causing humanitarian crisis: Erdogan to Putin    EU waiting for ‘realistic, operational & compatible' proposals from UK    Global disputes likely to thwart unity at G7 summit in France    IMF to hold weekend meetings in Argentina for Macri, Fernandez    Hamstring injury sidelines Kompany as Anderlecht lose again    Sisi issues Oks establishing board of Egyptian space agency    Rescuers confirm three killed, 300 evacuated after Indonesian ferry fire    Dollar drops as U.S.-China trade tension intensifies    European markets close lower as U.S.-China trade tensions escalate    Asia markets close higher as Japan-South Korea tensions escalate    Preview: Zamalek's Shikabala has another chance to stake claim for regular place    Time picks Egypt's Red Sea Mountain Trail as one of World's Greatest Places 2019    'Upskirting' abuse arrest in Spain brings calls for new laws    UNWHO head presents Sisi with report on Egyptian health initiatives, praises efforts in healthcare    INJAZ Egypt launches "Starting Right" program for students    Al Kenz II: Egyptian cinema's sequel mania but not in the usual sense    Sisi, Egyptian ministers discuss implementing health insurance system    European shares dip as Fed cools further easing hopes    Egypt PM discusses criteria for exemption from health insurance system fees    Contracting new coach for Egypt's football team a priority: Amr El-Ganainy    Egypt garment exports rise 9% in 7 months    Egypt's Nile water committee reviews trilateral negotiations on Ethiopia's GERD    Liverpool thankful to have Egyptian star Salah on his frontline: Klopp    Egypt's Baron Empain Palace to be reopen after renovation    Court sentences six to death, 41 to lifetime imprisonment violence related case    Trump says he would release Mideast peace plan after Israeli elections    ACWA Power compares 3 bids to supply production units for Luxor power station    NBE announces EGP 2.5m prizes for handball youth teams for their world achievements    What do you know about gold alloying?    Jennifer Lopez evokes Egyptian outrage post her North Coast performance    Cairo's historic Tahrir square to be renovated – PM    Unprecedented Glory: Egypt win Men's U-19 World Handball Championship    Political parties gear up for parliamentary, senate, local elections    IS claims responsibility for suicide bombing killing 63 in Afghan wedding    Al-Sisi honours Egypt's scholars on Science Day    12th National Egyptian Theatre Festival fuel up public theatre art scene    28th Citadel Festival for Music and Singing embraces attendees with international troupes    Serbian Micho to be Zamalek's new coach: Egypt's Mortada Mansour    Cairo University tops 2019 Shanghai Academic Ranking    3 sentenced to death for 2016 killing of 4 Egyptian policemen    Too early to estimate Nile's flooding volume: Irrigation Ministry    Ministry of Environment has a plan for "black clouds season"    Sudan's key opposition may nominate economist Abdalla Hamdok for prime minister    LA Opera declines details on longtime general director's investigation    Sudan opposition to nominate economist Abdalla Hamdok for prime minister: Sources    Photo of Egyptologist Zahi Hawass to decorate NYC's Times Square to promote tourism to Egypt    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.





Egypt's economy to grow 3.1 pct in FY 2012/13
Published in Daily News Egypt on 21 - 12 - 2011

CAIRO: Egypt's economy will grow by only 1.8 percent this fiscal year and 3.1 percent next as it recovers slowly from the political upheaval that ousted president Hosni Mubarak and disrupted the economy, a Reuters poll showed on Wednesday.
The survey of 10 economists forecast that year-on-year gross domestic product (GDP) in the Arab world's most populous nation would remain steady at 1.8 percent in the year to June 30, 2012, compared with the last fiscal year, but revised up from the 1.3 percent expected in the September poll.
Growth will then pick up to 3.1 percent in 2012/13, but still far short of 6 percent-plus growth rate that economists say Egypt needs to start creating enough jobs for its expanding population of 80 million people.
Egypt's economy is reeling from a series of violent clashes against the ruling military council since a popular uprising ousted Mubarak in February that sent investors and tourists packing.
But economists say a clear timetable for a transfer of power to civilians could slightly bolster growth in the fiscal year 2012/13.
"We see that growth should pick up in the next fiscal year," said David Cowan, economist at Citi.
"Once we are through the politics, through the elections and everything, one hopes that there is a return to more confidence that should start a slow pickup in investment and some recovery in the tourism sector."
Tourism, a major source of revenue for Egypt, used to account for over a tenth of GDP before political turmoil deterred visitors. Egypt expects to earn only $9 billion from tourism in 2011, down by about a third on a year earlier.
Foreign direct investment (FDI) fell to $440.1 million in July-September from $1.60 billion a year earlier, helping to create a $2.36 billion deficit in the balance of payments versus a surplus of $14.7 million a year earlier.
"For us the whole battle is to get through all the elections and get a government in place which can start making more concrete policy decisions and then move forward from there," Cowan added.
A flare-up of violent clashes in Cairo between police and protesters this week has marred a staggered parliamentary election that began on Nov. 28 and ends on Jan. 11, but the army has said a promised transition to civilian rule will go ahead.
Analysts say the most pressing economic threat is the slide in Egypt's foreign reserves as tourism and export earnings suffer from the unrest and capital flees the country.
Reserves have tumbled from around $35 billion at the start of 2011 to about $20 billion at the end of November, and may in coming months reach levels where the central bank is no longer able to prevent a sharp, sudden depreciation of the Egyptian pound.
"They've run down their foreign exchange reserves, so effectively they have less and less savings to support the currency going forward," Cowan said.
Pressure on the pound is expected to continue, with forecasts suggesting it will weaken to 6.30 pounds to the US dollar by the end of June and to 6.50 by the end of June 2013 from a seven year-low of around 6.02 pounds now.
A big depreciation of the pound would put upward pressure on inflation, which is seen accelerating to 9.4 percent end-June before easing to 8.9 percent by the end of June 2013 on estimated lower global food prices.
Inflation climbed to 9.1 percent in the 12 months to November, up from 7.1 percent in October.
"We are forecasting global food and energy prices to be falling next year. But obviously inflation is going to remain very uncertain depending on what happens with the Egyptian pound as well," said Said Hirsh, Middle East economist at Capital Economics.
"It could deteriorate a lot worse to say 8 pounds to the dollar if there is no agreement on external funding soon, which will obviously make inflationary pressure higher."
Egypt, which turned down an offer of a $3 billion International Monetary Fund loan in June saying it did not need the funds, now says it may resume talks with the organization.


Clic here to read the story from its source.